NJ Senators Halt Drilling

By Bill CahirNewhouse News ServiceWASHINGTON -- U.S. Sens. Bob Menendez and Frank Lautenberg on Thursday won a vote during Senate energy debate to block exploration for natural gas off the coast of Virginia.

The narrow New Jersey victory, 43-44, was important to the Garden State coastline, according to the two Democrats. A spill off Virginia could have soiled New Jersey beaches, they said.

The two lawmakers opposed a plan advanced by U.S. Sen. John Warner, who proposed to let the governors and state legislatures in 14 Atlantic states vote on whether or not to allow the exploration for natural gas off their coastlines.

If natural gas were located, each state legislature would be required to conduct a secondary vote -- and get the governor's signature a second time -- before allowing companies to start extracting what had been found. Warner, R-Va., additionally proposed to direct 6.25 percent of the royalties into state-based environmental mitigation funds.

"Prices for natural gas have risen 74 percent since 2000. That is in the last seven years. Domestic production has remained comparatively flat ... It is time America turned to its own resources," Warner said.

Menendez claimed that exploring for natural gas off Virginia posed a hazard for South Jersey.

"The area the senator from Virginia is interested in opening to drilling is about 75 miles from Cape May, New Jersey -- more than close enough for spills to pollute New Jersey's beaches," Menendez said.

Menendez and Lautenberg have introduced a separate bill that would permanently block drilling for oil and gas in the mid- and northern Atlantic. An existing ban signed by President Clinton lapses in 2012.

•
The Senate this week will continue debate on its energy bill, and the main source of friction will be possible changes to the Corporate Average Fuel Economy Standards (CAFE) for cars, sport utility vehicles and light trucks.

The Senate legislation would require manufactures to increase the average fuel efficiency of their SUVs and light trucks from 22.2 miles per gallon to 35 miles per gallon. The standard for cars likewise would rise from 27.5 mpg 35 mpg.

But that relatively ambitious plan is not likely to fly. Foreign and domestic car makers -- including BMW, Ford Motor Company, General Motors, Mazda, Mitsubishi, Porsche, Toyota and Volkswagen -- are backing a rival approach by U.S. Sen Carl Levin, D-Mich.

He contends that auto makers cannot meet the 35 mile per gallon fuel standard for trucks and SUVs by 2020. Levin proposes to set fuel efficiency standards for cars at 36 miles per gallon and to maintain a lower, 30 miles per gallon standard for trucks and SUVs. Levin also would delay the changes for five additional years, until 2025.

"When you look at CAFE, you really need to be looking at auto safety, you need to be looking at how it impacts the consumer's pocketbook," Levin said last week.

But the White House has issued a policy statement claiming that Congress ought to refrain from setting mileage standards at all.

•

In another dispute that may derail the Senate bill, U.S. Sen. Arlen Specter is trying to make it illegal for oil-producing nations to forge cartels that control petrol supply.

Specter, R-Pa., is backing a pending Senate amendment would render the Organization of Petroleum Exporting Countries (OPEC) subject to American anti-trust laws.

The Secretary General of OPEC, Abdullah al-Badri, recently threatened to cut investment in new oil production in response to plans announced by the United States and other Western countries to use more biofuels. He warned that cutting investment in new production would cause oil prices to `go through the roof.' Well, we do not have to tolerate threats of that sort," Specter said Wednesday.

Specter's anti-OPEC amendment has not yet come to a vote, but it is likely to pass, as it has before. However, it is unlikely to survive any House-and-Senate talks that also would involve the White House.

The Bush administration does not want Specter's anti-trust proposal to become law, lest the president find himself facing rising domestic political pressure to file a lawsuit against U.S. allies in the Middle East, including Saudi Arabia, Qatar and the United Arab Emirates.

Including the anti-OPEC measure in the Senate energy bill would provoke a presidential veto, the White House said in its policy statement, because the penalties envisioned by Specter would "substantially harm U.S. interests abroad (and) discourage foreign investment in the U.S. economy."